Legal Consequences for Fraud & Ponzi Schemes - Transcript

So investors in Affinity fraud or Ponzi schemes obviously can bring actions but you know you have to ask yourself whether or not there is a deep pocket somewhere to sue because otherwise you’re going to be putting good money after bad and I counsel people this on the phone all the time you know I don’t want to take someone’s money for a Ponzi scheme where I don’t believe that there’s an ability to recover the money a lot of Ponzi schemers use it on fancy cars and beautiful houses that have high mortgages or they send the money overseas you know you have to look and find out whether there is a broker dealer this does happen in Branch offices that are unsupervised of broker dealers and Bank branches so you have to look and see if there’s any earmarks of someone who could have caught this and stopped it in time that had an obligation to do so the consequences for the Ponzi schemer are you know both civil and criminal with the SEC um and and if the SEC gets involved there would be a receiver typically that will dull out on a pro rata basis any proceeds they could muster you famously probably heard of the Madoff receiver and he did a great job not so in all Ponzi schemes if there is a receiver and there’s no broker dealer involved it’s best to sort of follow what the receiver is doing.